Can collection agency take you to court?

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In Canada, collection agencies might sue for unpaid debts, but typically as a last resort. This process starts with legal paperwork, like a Statement of Claim, and varies in its time limits across provinces. Ignoring a summons isn’t wise; it might lead to asset or wage seizures if you lose in court. You can defend yourself by contesting the debt’s validity or its statute limits. Reach out via phone, text, or live chat if you have any questions.

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Collection Agencies Court Question

Can collection agency take you to court? I’m trying to figure out if a collection agency can actually take legal action and bring me to court over a debt.

From: Anonymous Question
Location: Regina, Saskatchewan (SK)
Category: debt management plan

Collection Agencies Court Answer

In Canada, collection agencies do have the option to take you to court over unpaid debts, but it’s usually after every other avenue has been exhausted. The legal journey kicks off with a Statement of Claim and leads to a summons detailing the debt and upcoming court steps. The statute of limitations for starting legal action isn’t the same everywhere; it ranges from 2 years in Alberta and Ontario to 6 years in Manitoba and Nova Scotia. If they’re out of time, they can still ask you to pay up, but they can’t sue. You can defend yourself by proving either that the debt is beyond the statute of limitations or by challenging its accuracy. Just ignoring a summons? Not a great idea—it could lead to a default judgment against you. However, if you respond, you can present your case in court. If the court sides with the collection agency, the consequences might include deductions from your paycheck or grabbing your assets. For insights on handling your debt, consider researching options like debt settlement.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

Yes, a collection agency can take you to court over a debt. According to the Bankruptcy and Insolvency Act (RSC 1985, c 11), debt collectors have the legal right to initiate court proceedings to recover debts owed to them. Specifically, Section 68 of the act discusses the rights of creditors to pursue legal action for debts. Additionally, provincial regulations may also provide guidelines on the actions collection agencies can take, further supporting their right to seek a court judgment for unpaid debts. You can learn more about the role of debt collectors in this process.

From: OSB Helper

Related Questions to Collection Agencies Taking You To Court

Here are the top 5 most frequently asked questions related to the topic of whether a collection agency can take you to court, based on common concerns and search trends:

1. Can a collection agency take me to court?

Yes, a collection agency can take you to court if you have not paid your debt.

2. What happens if a collection agency sues me?

If a collection agency sues you and wins, they can obtain a judgment against you, which may result in wage garnishment or a lien on your property.

3. How long can a collection agency sue me for unpaid debt?

The time limit for a collection agency to sue you varies by province, typically ranging from two to six years from the last payment or acknowledgment of the debt.

4. Can a collection agency take my house if I owe debt?

Yes, if a collection agency obtains a judgment against you, they can register a lien against your home or other real property, which could lead to the sale of the property if the debt is not paid.

5. Can a collection agency garnish my wages?

Yes, if a collection agency obtains a court judgment against you, they can garnish your wages to collect the debt[1][3][5].

If you have a question about debt see our debt questions or ask your own debt related question.

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